United States District Court, E.D. Wisconsin
DECISION AND ORDER
RUDOLPH T. RANDA, District Judge.
Appellant Linda Reed appeals the July 17, 2015, Order of the
bankruptcy court, which dismissed her adversary complaint in
the above-captioned action. Pro se appellee Joseph L.
Griffin, Jr. filed a motion to dismiss the appeal (ECF No.
10), contending that any debt he owed to Reed was discharged
in an earlier bankruptcy proceeding.
Court has jurisdiction over this matter pursuant to 28 U.S.C.
§ 158, which allows district courts to hear appeals from
final judgments, orders, and decrees of the bankruptcy
courts. District courts apply a dual standard of review in
bankruptcy appeals-the bankruptcy judge's findings of
fact are reviewed for clear error, while conclusions of law
are reviewed de novo. In re Midway Airlines, 383
F.3d 663, 668 (7th Cir. 2003); In re Smith, 286 F.3d
461, 464-65 (7th Cir. 2002). However, where the bankruptcy
code commits a decision to the discretion of the bankruptcy
court, that decision is reviewed only for an abuse of
discretion. See Wiese v. Cmty Bank of Cent.
Wis., 552 F.3d 584, 588 (7th Cir. 2009). "[A] court
abuses its discretion when its decision is premised on an
incorrect legal principle or a clearly erroneous factual
finding, or when the record contains no evidence on which the
court rationally could have relied." Id.
matter involves two bankruptcy filings in the Eastern
District of Wisconsin by Appellee-Debtor Joseph L. Griffin,
Jr. and his wife, Latoya. The first case, No. 05-27208 (
Griffin I ), was filed under chapter 13 in April
2005 and converted to chapter 7 in April 2008.
had a 2005 small claims money judgment against the Griffins.
The Griffins listed Reed and the debt owed her on Schedule F
in the Griffin I bankruptcy. Reed did not file a
complaint seeking a determination that the debt owed to her
was nondischargeable, and the Griffins received a chapter 7
discharge of indebtedness on August 8, 2008.
second case, No. 15-24529 ( Griffin II ), was filed
in April 2015. In June, Reed filed an adversary complaint
(No. 15-2259) in relation to Griffin II, seeking
declaration that the small claims debt the Griffins owed her
was nondischargeable under 11 U.S.C. § 523(a)(2). (Bankr. R.
#1.) Reed also requested that the bankruptcy court waive her
filing fee. (Bankr. R. #2.)
June 15, 2015, Order, the bankruptcy court informed Reed that
the debt she sought to have determined nondischargeable
appeared to have been discharged in Griffin I and
therefore Reed's motion to waive the filing fee was
denied for lack of success on the merits of her complaint.
(Bankr. R. # 6.) The order also stated that the court would
not issue a summons and would dismiss Reed's complaint
with prejudice on July 14 unless she showed a good faith
basis to maintain that the debt owed to her was not
discharged in Griffin I.
8, Reed filed a response to the court's order. (Bankr. R.
# 8.) The gist of Reed's response was that the debt owed
to her was not discharged in Griffin I because her
claim had not accrued yet, and she relied on Wisconsin's
discovery rule for torts, which states that a claim accrues
when the victim first discovers her injury. She contended
that her claim first arose when she discovered that the debt
owed to her was the result of fraud, which she stated was not
until the filing of the 2015 bankruptcy.
bankruptcy court held that the basis for Reed's claim was
the money judgment she obtained in state court in 2005,
establishing that Reed discovered her injury - the loss of
money due to the Griffins' failure to repay her loan to
them - before the Griffins' 2005 bankruptcy. The court
further noted that Reed did not argue nor did the record show
that she was not listed as a creditor in Griffin I
or that she did not receive notice of that bankruptcy.
Additionally, the court indicated that Reed had conceded her
debt was discharged, quoting Reed's statement:
"[t]he new filing of the Griffins['] 2015 bankruptcy
has triggered [Reed] to investigate their current bankruptcy
and the previous one [in] which the wrongdoers discharged
[Reed's] debt. " (Bankr. R. #9, 2-3.) The court
held that the facts Reed presented confirmed that her debt
was discharged on August 8, 2008, because she failed to
timely file an adversary complaint in Griffin I to
contest its dischargeability, citing 11 U.S.C. § 523(c)(1)
and Fed.R.Bankr.P. 4007(c).
17, the bankruptcy court dismissed Reed's adversary
proceeding, holding that she failed to show a good faith
basis to maintain that the debt owed to her was not
discharged in Griffin I and that she did not make
any allegation that would have afforded her standing to
allege that the Griffins were not entitled to a discharge in
Griffin II. The bankruptcy court held "now that
her debt has been discharge[d] she is forever enjoined from
seeking to collect on it. 11 U.S.C. § 524(a)(1) & (2)."
(Id. at 3.)
contends that the bankruptcy court erred when it did not
provide her relief. (Appellant Opening Br. 4, ECF No. 5.)
Griffin seeks dismissal of the appeal for the following
reasons: (1) the debt was discharged in 2008, as reflected by
the July 2015, satisfaction of judgment in Reed's
underlying state small claims action; (2) Reed has used the
legal process to harass the Griffins and their friends and
family, which can be verified by a search of Illinois and
Wisconsin state court records; and (3) Reed is retaliating